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No deal, no steel: US trade envoy threatens to sink NAFTA

No deal, no steel: US trade envoy threatens to sink NAFTA
President Donald Trump’s chief trade negotiator has threatened to scupper the free trade deal with Canada and Mexico if no changes are made. US Trade Representative Robert Lighthizer said bilateral accords could replace it.

On Monday, Lighthizer warned that time was running “very short” for the talks in Mexico City to finalize changes to the 1994 North American Free Trade Agreement (NAFTA). "We would prefer a three-way tripartite agreement,” he said, but: “If that proves impossible, we are prepared to move on a bilateral basis."

The Washington envoy held out exemptions from the looming tariffs of 25 percent on imported steel and 10 percent imported aluminum, which are set to be formally announced this week, as an incentive for the two neighboring countries to agree on a new deal.

Mexican Economy Minister Ildefonso Guajardo, who represented his government at the talks, tweeted that including Mexico and Canada in the import tax regime was not the way to a “new NAFTA.”

"We should be excluded because the most integrated steel industry in the world is the North American steel industry," Guajardo told reporters later.

Trump, however, believes that tariffs should only be lifted once a “new and fair NAFTA” agreement is signed. In a series of tweets, Trump also accused Mexico and Canada of harming the US agricultural industry and also accused Mexico of not doing enough to stop narcotrafficking.

Mexican Foreign Minister Luís Videgaray tweeted back that halting drug trafficking was a “shared responsibility.”

The US President also faced opposition from the Republican party in Congress over the tariffs. “We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan,” AshLee Strong, a spokeswoman for House Majority Leader Paul Ryan (R-Wisconsin). Senator Jeff Flake (R-Arizona) also warned against a “trade war.”

Canada and Mexico are the second and third greatest US trading partners, each accounting for more than $500 billion in trade per year, almost rivaling China and the 28 European Union member states combined. NAFTA, signed by former President Bill Clinton in 1994, has been criticized as a disastrous deal for US manufacturing jobs by the same labor unions that backed his election campaign as well as his wife, Hillary’s.

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